Stock market rally couldn’t save the Toys “R” Us IPO

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The S&P 500’s record high this week apparently wasn’t enough to convince the owners of Toys “R” Us to move forward with the retail chain’s long delayed IPO. Private equity firms Bain Capital and KKR, along with Vornado Realty, decided today to officially withdraw plans to take Toys “R” Us public. Although IPOs raised billions of dollars in the first quarter of this year, partly because of the market rise, traditional big box retailers have been hurt by the continuing shift to online buying.

Bain first tried to go public with Toys “R” Us, which has about 1,500 stores, in 2010. Since then, it’s been a bit of a running bet in the IPO community to predict when Toys “R” Us would finally IPO. But its sales have been falling, including disappointing holiday numbers, and then CEO Gerald Storch stepped down. It was only a matter of time for Toys “R” Us owners to decide that a public offering wasn’t the right move.

But Toys “R” Us is likely an outlier. The US keeps churning out positive data, including today’s better-than-expected consumer spending figure, and that will continue to make for a positive environment for IPOs. Of course, if you exist in an arena that is slowly disintegrating, like traditional retail, no market rally can save you.